Expats and commercial real estate experts talk about reconnecting and reinvesting to create One Detroit.

Peter Cummings, executive chairman of The Platform, was among 20 speakers Sept. 12 at “Real Estate 101 in the D,” a pre-session kickoff of Detroit Homecoming V.

When Peter Cummings and his development partners began working with Whole Foods Market in 2011 to build its first Detroit store, a Whole Foods executive projected it would generate perhaps $12 million to $15 million a year.

Those projections were more than a little off. Since opening in 2013, Midtown Detroit’s Whole Foods has been generating $30 million annually, Cummings said.

“Prior to that, I saw Detroit primarily as a series of challenges,” said Cummings, executive chairman of development firm The Platform. “But because of that experience, I started thinking of Detroit primarily as grossly underserved, particularly for the residents in the neighborhoods. We have more opportunities in Detroit than we have talent in the field able to take advantage of (those opportunities).”

Cummings was among 20 speakers Sept. 12 at “Real Estate 101 in the D,” a pre-session kickoff of Detroit Homecoming V. Detroit Homecoming is an invite-only event held to encourage Detroit expats to invest in the city. So far, the annual three-day event has spurred about $300 million in pending and closed investments, said Crain’s Detroit Business Group Publisher and Detroit Homecoming Director Mary Kramer, who emceed the Real Estate event. Nearly 100 of Detroit’s most successful expats along with some resident entrepreneurs attended “Real Estate 101 in the D,” which took place in an alcove of the bustling historic Fisher Building, an Albert Kahn masterpiece in Detroit’s New Center that The Platform purchased with partners in 2015.

Experts shared strategies for redevelopment; growth; preservation of affordable housing; community engagement; collaboration between public, private, and philanthropic groups; and a host of lucrative and forward-thinking opportunities.

Growing ‘One Detroit’

The prospects in Detroit extend beyond advancing real estate projects, said Randy Book, executive vice president of Colliers International. “It’s also for business. If you understand what we’re doing, there are great opportunities.”

What developers, real estate firms and other businesses are doing is generating revenue, jobs and opportunities by:

revitalizing neighborhoods

adding hotel space and convention space

creating mixed-use spaces for local and national iconic brands and new restaurants

rehabbing historical architecture for a rapidly changing office market, and

helping residents unearth the resources to redevelop their own homes.

Photo

“Something is going on in Detroit today that is magical that we have not seen in many, many years,” said Chemical Bank Chairman Gary Torgow as he addressed the crowd at the “Real Estate 101 in the D” event.

When leadership at Chemical Bank Corp., a $20 billion financial institution currently headquartered in Midland, saw what was happening in Detroit, they decided to come where the action is, said Chemical Bank Chairman Gary Torgow, founder of the Sterling Group, a Michigan-based real estate, development and investment company.

Detroit hasn’t had a powerhouse hometown bank since NBD was acquired some years ago, he said. Now, Chemical Bank is building a headquarters near the Fox Theatre that could cost between $50 million and $100 million.

“Something is going on in Detroit today that is magical that we have not seen in many, many years,” Torgow said.

Creating vibrant, inclusive neighborhoods

Already, there are billions of dollars in development underway in Detroit.

Much of that is housing. Developers recently completed more than 1,800 units of rental housing. Yet, with a 98 percent occupancy rate in the rental housing market, Detroit still is underserved. Currently, more than 1,900 units are under construction and nearly 2,500 are in the pipeline.

Detroit’s Strategic Neighborhood Fund, run by the city of Detroit in partnership with Invest Detroit, has been a highly successful tool to help redevelop urban areas.

The Fund has helped redevelop three neighborhoods and is looking at an additional seven, including stabilizing single-family homes and adding retail, mixed-use, multi-family sites and parks and streetscapes, said Arthur Jemison, Detroit’s chief of services and infrastructure.

Brush House

Ford mobility campus

Location: CorktownDetails: 1.2 million-square-foot project involves overhaul of train station and former book depositoryDeveloper: FordBudget: $740 million

Mike Smith, vice president of neighborhoods for Invest Detroit, said Strategic Neighborhood Fund 2.0 will be a $1.01 billion initiative.

“We are taking a step back and focusing on eight to 15 blocks at a time and really trying to … get them going,” he said. “What has happened here is an incredible collaboration between many partners, all of whom recognize the huge lift it’s going to take to make all this happen.”

One example of vital collaboration is with Fitz Forward, a joint venture with developers Century Partners and The Platform — in partnership with community leaders, The Strategic Neighborhood Fund, The City of Detroit, and Liberty and Chemical banks — in the Fitzgerald neighborhood. Fitz Forward bought 119 parcels to revitalize the community and plans to invest more than 300 additional parcels.

Doing well by doing good

While philanthropic organizations can help “de-risk” neighborhood development, Aaron Seybert, social investment officer for The Kresge Foundation, said the only way to make development in Detroit sustainable is for those people who came in early and took real risk to make “gobs” of money. “We are welcoming those folks who want to come to town, do real work, bring capital with them and be invested for the long term,” he said.

In 2015, Moddie Turay came to Detroit from Washington, D.C., for an interview and knew he needed to move. The founder and principal partner of Detroit-based City Growth Partners, which is heading several redevelopment projects in Brush Park, said, “Detroit to me is the No. 1 city, from a development perspective, where you can do well by doing good.”

Examples of doing good include exceeding the minimally required percentage of affordable housing in a development, which is 20 percent.

Some projects are aiming higher, said The Platform development manager Myles Hamby. For instance, he said half the rental units at The Platform’s Islandview neighborhood project, on East Grand Boulevard, are designated as affordable.

In August, The Platform also announced it would, in addition to building new residences, add a much-needed grocery store to the New Center neighborhood.

Nearby, Henry Ford Health System is transforming 300 acres across from its flagship Detroit hospital. The development will include a new Cancer Pavilion, retail, housing and other mixed uses. Bob Riney, COO and president of healthcare operations for the hospital, said HFHS is also is working with community leaders and other partners to help current area residents find funding to rehab homes.

Revolutionizing retail and office space

Even retail, mixed use and office building developers are revolutionizing the landscape. However, experts cautioned that for them to see success, it’s essential they understand the neighborhood and who retailers will serve.

Bedrock Detroit plans “to continue to add unique brands, authentic experiences and one-of-a-kind destinations that can’t be found anywhere else in the world and certainly can’t be duplicated online,” said Jennifer Skiba, vice president of leasing at Bedrock LLC. Another Bedrock goal includes a broad range of price points in retail, services and uses that meet the needs of the diverse customer base.

Regardless of what’s been accomplished so far, Skiba said, “We’re really still in the first inning of what’s happening in Detroit. There’s a lot yet to come.”

Get Free Newsletters

Make sure you don't miss a thing by subscribing to our newsletters.

Email Address

Join Today

With a Crain’s Detroit Membership you get exclusive access, insights and experiences to help you succeed in business.